THE CASE FOR A FEDERAL JOB GUARANTEE PROGRAM William Darity, Jr. Samuel DuBois Cook Distinguished Professor of Public Policy, Duke Sanford School of Public Policy Dawn Milam Senior Advisor, The Justice Collaborative Institute September 2020 EXECUTIVE SUMMARY The coronavirus pandemic has brought the ⊲ Invest in projects that benefit the public, country to the brink of economic collapse. While such as caregiving (especially child and elder the CARES Act provided some temporary relief, care); the conservation of natural resources; sustained economic recovery requires a plan the creation of emergency relief programs; to give unemployed workers an opportunity investments in education, health, and culture; to support themselves and their families with and the building of critical infrastructure. dignity. New Deal-style federal jobs programs It would also make these services affordable can help eliminate working poverty and create a for all. more stable, inclusive economy. Congress should establish a program that provides a true public ⊲ Offer a better response to economic crises option for employment and gives existing workers, like the pandemic by eliminating the need for particularly those confined to the low end of the poorly paid and unsafe employment. labor market, jobs in projects that will serve the Polling by Data for Progress and The Justice public welfare. Collaborative Institute shows strong bipartisan A federal job guarantee program would: support for a federal job guarantee program. Sixty-four percent of likely voters, including 78% ⊲ Provide a permanent public option for of Democrats and 53% of Republicans, said they workers to receive training, living wages, would support a federal job guarantee program benefits, better working conditions, and full as part of the government’s response to the worker rights, as a true alternative to the economic crisis. private job market. Do you support or oppose a federal job guarantee as part of the federal government’s response to the current economic crisis? Topline 29% 35% 17% 11% 9% Democrat 41% 37% 11% 8% 3% Independent 18% 34% 32% 8% 7% Republican 21% 32% 13% 15% 18% 0% 20% 40% 60% 80% 100% THE CASE FOR A FEDERAL JOB GUARANTEE PROGRAM 2 only widened the divide between those with and BACKGROUND without employment that offers a meaningful path to financial security. The United States is several months into the worst recession since the Great Depression. Record numbers of workers have lost their jobs, with A FEDERAL JOB thousands more furloughed or fearing future layoffs. More than 27 million Americans are GUARANTEE receiving some kind of unemployment benefit. And because most American workers receive FOR ECONOMIC health insurance through their employer, the job SECURITY crisis has even more significant consequences during the COVID-19 pandemic: A recent study A federal job guarantee is needed to eliminate shows that 5.4 million workers lost their health working poverty and stabilize the pandemic- insurance between February and May, nearly 40% crushed economy. A permanent public work more than the previous record-setting losses in sector offsets the private sector by competitively the 2008-09 recession. providing goods, services, and opportunities as a The CARES Act provided important stop-gaps path toward economic security. The government to address the overwhelming unemployment serves as the guarantor and supplier of jobs that numbers, offering an additional $600 per week provide training, living wages, benefits, better until the end of July, to all those receiving working conditions, and full worker rights, as unemployment insurance, and extending the a true alternative to the private job market. length of time they could receive benefits. The availability of such an alternative has the The legislation also established the Paycheck added benefit of protecting workers who wish Protection Program to provide federally- to unionize because it effectively eliminates guaranteed loans to small businesses for the employers’ ability to threaten workers with job purpose of maintaining payroll, benefits, and loss. Like a public banking option for financial other expenses for eight weeks. But these services, a federal public job sector would not programs are limited, intended only as emergency replace the private market, but instead compete measures, and not as solutions to the deepening with the private sector, particularly at the low employment crisis. end of the labor market, increasing job quality, quantity, and accessibility. Even before the pandemic, the country was marked by steep income inequality, with the Another critical element of a federal job productivity gains of economic expansion going guarantee is the opportunity to invest in projects to the wealthiest Americans. The most vulnerable that benefit the public, but may be undervalued groups—including Black and Latinx people, by the private sector. For instance, child and veterans, and people with disabilities—are much elder caregiving is poorly served by the private more likely to be involuntarily unemployed or market, where services are costly for clients while underemployed. Forty percent of workers in provider wages are extremely low. A public option America are employed in insecure, “contingent” for dependent care, among other important jobs, and almost half (44%) of workers work in services, is a better tool to ensure that everyone low-wage jobs. The coronavirus pandemic has has access to the services—and, for providers, the THE CASE FOR A FEDERAL JOB GUARANTEE PROGRAM 3 compensation—needed for individual and social Rights, and with his partner, Coretta Scott King, wellbeing. Other federal jobs programs should endorsed federal legislation that could guarantee similarly serve the public good, investing in a job to anyone able and willing to work. projects such as sustainable and energy-efficient During the Great Depression, Roosevelt’s infrastructure, conservation, and emergency direct-hiring programs such as the Civilian relief projects. Conservation Corps (CCC) and the Works Progress Finally, a comprehensive federal jobs program is Administration (WPA) were highly successful an important part of addressing urgent crises at alleviating economic suffering. These and like the pandemic. By offering safe, reasonable other New Deal jobs programs ushered in the working conditions and adequate compensation, post-war economic boom through the creation public sector jobs would eliminate the need for of beneficial infrastructure like roads, bridges, individuals to seek out unsafe or inadequate schools, and parks; development of cultural private sector jobs. The infrastructure of federal and social programs; and the conservation of jobs programs would also allow for quick natural resources. As World War II loomed and deployment of emergency relief services, such the economy improved, Congress eliminated as contact tracing and production of personal these programs and, in doing so, extinguished the protective equipment. Particularly in an economic permanent, long-reaching job guarantee benefit crisis, a federal job guarantee will have a critical Roosevelt and others had hoped to achieve. impact on expanding labor force participation Yet, for the years that the United States and restoring the economy. government was the nation’s largest employer, federal jobs programs both helped to reverse HISTORICAL the economic crisis and built enduring public achievements. Joblessness fell dramatically as the PRECEDENT federal government provided unemployed workers an opportunity to support themselves and their The idea of a federal job guarantee is neither new families with dignity. Indeed, if workers employed nor radical. In his 1944 State of the Union address, in direct job-creation programs were counted as President Franklin D. Roosevelt said that “true employed (as they are in unemployment statistics individual freedom cannot exist without economic today), the nation’s unemployment rate dropped security and independence.” He proposed a from nearly 23% to 10% during Roosevelt’s first “second Bill of Rights” to provide economic term in office, rather than the commonly reported security, wherein the first article would secure the drop from 23% to 17%. right to a “useful and remunerative job.” Harry Impetus for funding the projects did not arise Truman’s 1945 proposal to Congress echoed the from consumer demand, but from an interest same theme. Sadie Alexander, the country’s first in the public good. Roosevelt’s work programs Black economist, advocated for full employment revealed a strong ethic for projects that would programs as a means to achieve racial economic benefit the public. His vision prioritized the equity. Civil rights leader Bayard Rustin prepared conservation of natural resources; the creation a Freedom Budget for the A. Philip Randolph of emergency relief programs; investments in Institute in 1966, which included a provision for education, health, and culture; and the building a job guarantee. In the 1960s, Dr. Martin Luther of critical infrastructure—the types of projects King, Jr. likewise called for an Economic Bill of THE CASE FOR A FEDERAL JOB GUARANTEE PROGRAM 4 often overlooked by the private sector. Decades substantial political support and the dire need to later, it is difficult to overstate the valuable legacy rebuild our economy, the federal job guarantee is of this public contribution. Not only did the a policy solution that all policymakers should be New Deal jobs programs propel a nation out of enthusiastic